Is Now the Time For Selling Your Business?Have you been thinking about selling your business but just can’t decide if now is the best time? Do you find yourself repeatedly analyzing the economic situation and wishing you had a crystal ball? There are positive signs and there are negative signs…If you’re still up in the air and can’t quite decide whether or not to hit the exit plan button, here are six reasons you might want to consider getting out now.1.You’re less interested in fighting the good fightA lot of business owners took the Great Recession in the teeth. If you’ve got your business stabilized and the prospect of possibly having to fight through another recession leaves you panic-stricken, it could be time for you to get out.

2. The worst is behind you

Let’s say you were mentally ready to consider selling a few years ago and then 2008 hit and 2009 was bad, and in 2010 and 2011 you made cuts and adjustments, sonow you’re starting to see some profit and revenue growth. With your numbers going in the right direction for selling your business, so now might be just the right time to make your move.3. The tax man is comingGovernments around the world are looking for money to fund the cost of an aging population. At some point this will mean increased taxes for business owners.4. Nobody is lucky foreverIf you’re lucky enough to be in a business that actually benefits from a bad economy, congratulations... you’ve probably just had the four best years of your business life. But no cycle lasts forever and right now might be a great time to take some chips off the table.5. The coming glutAs a business owner, demographics are not on your side. As the baby boomers start to retire in droves, we’re going to have a glut of small businesses coming on the market. That’s great if you’re buying; but if you’re a seller, you may want to avoid the flood and head for higher ground now.6. The closing windowSince 2008, it’s been tougher for private equity companies to raise money; so many firms had their last successful round of fundraising a number of years ago.Many of these funds have a five-year window in which to invest or they have togive the money back to the people who gave it to them. Some boutique private equity firms will make investments in companies that have at least one million dollars in pre-tax profits (larger private equity firms will not go below $3million in EBITDA); so if you’re in the seven-figure club, you could get a bidding war going for your business among private equity buyers keen to invest their money before they have to give it back.

So many of people in business world are ready to sell their business. Its treated like a fashion in business world. To keep a business for long time is not a trendy one.

Reply

Bob Fariss

7/23/2013 03:56:50 am

We are seeing different trends in how long businesses are kept by owners depending on their ages. Many Baby Boomers anticipated selling and retiring by now; but since the 2008 recession and high taxes have driven down their values, they decided just to keep on going. Now that values are returning they are in danger of losing value (and years of their life) to burn-out if they don't exit plan. On the other hand we see Gen Y (Milllineals) expecting to flip careers and businesses every 3 years or so. This has created a lot of unrealistic expectations from them. Gen X is in-between and probably doing the best here.

I agree that for or a business idea to be a good one, it needs to be able to last over a long term. Corporations are able to survive indefinitely; however, people do not. The owner of a private business will have to do something about their ownership at some point because as human beings, we all will eventually burn-out. There are 3 choices, transfer the business (either to a buyer or perhaps your family or employees), ignore this problem and have the business liquidated when you can no longer run it, or use private restructuring to begin moving value from the business to your personal estate while you are still running it.

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Bob Fariss writes about the issues facing Executives in career development. He teaches Business Model Thinking and also represents individuals with an entrepreneurial flair seeking to sell, buy, or start-their own business.